Rating: 
Summary: Great all around insight
Review: --I am a student at a small, private university in central Illinois majoring in Finance. Throughout my time there I have become very involved in the stock market and what, or should i say who makes it run. I am currently working as an intern with a local investment company, and throughout my research I have come upon Dr. Berstein's book "The Four Pillars of Investing." I have not yet finished this book, but i am merely pages away from the end and I can't wait to wrap all of Dr. Berstein's findings up and try to apply them in every way possible. I especially enjoyed the section describing the 3rd pillar I believe it was dealing with investor psychology. I have come away whith great applicable advice that will prove to be invaluable as I continue in my career in investing. I must admit that what initially drew me to a career in securities was the excitement and uncertainty of the trade, but what Dr. Bernstein has taught me is that to trade on feelings is a sure way to loose every penny you have. I believe, although I have much to learn, that I already have a well-rounded understanding in investing in the long term after reading this book. Much more of an understanding than many casual investors and even many brokers have, as i have learned that to be a broker doesn't require, but a very minimal understanding of the ins and outs of the stock market.
--After reading this book, I can't wait to read Dr. Bernstein's other book, though I hear it contains drier content, "The Intelligent Asset Allocator." I would definately recomend this book to anyone seeking to gain a more well rounded concept of investing, whether you are looking for somewhere to start, or merely to sharpen your skills, this is the right place to look.
--My compliments to Dr. Bernstein and this great presentation of investment knowledge.
Rating: 
Summary: 5 top insights from The Four Pillars of Investing
Review: 1. Risk and return go hand in hand:
No matter what type of investment you make, "you are rewarded mainly for your exposure to one thing - its risk... The biggest risk of all is failing to diversify properly."2. Learn from history:
Sometimes the investing public loses perspective, and becomes either unjustifiably positive or negative. Any investor who does not understand history is operating with a significant handicap, and the book offers a primer on financial history. 3. Human nature can lead you astray:
Unless you become aware of - and resistant to - these common flaws, human nature suggests you will have a tendency to: pay too much for some types of stocks, trade too much, tend to be overconfident, and "regularly make irrational buy and sell decisions." 4. "You are locked in a life-and-death struggle with the investment industry":
Financial services companies exist "almost entirely for one purpose: the extraction of fees and commissions from the investing public." Furthermore, the author argues that the industry "operates at a level of educational, moral, and ethical imperatives that would be inconceivable in any other industry." 5. Figure out what you are going to need, then devise a strategy to get there:
Based on the four "pillars" outlined above, the author presents a series of steps designed to help you calculate how much you will need to save to meet your goals, and how to design and manage your financial portfolio so that it takes you where you want to go. "With relatively little effort," concludes the author, "You can design and assemble an investment portfolio that, because of its wide diversification and minimal expense, will prove superior to most professionally managed accounts."
Rating:
Summary: Best investment book I have ever read
Review: A number of reviewers comment on Bernstein's aversion to active managers. This is a point which has been demonstrated again and again in the financial literature. See especially 'A Random Walk Down Wall Street' by Burton Malkiel and both books by John Bogle. Although some managers, historically, outperform, they are not the same managers who outperform in the future. This has been demonstrated again and again with different sample periods and different data: it is the dirty secret of the investment management industry, that the rational investor would choose the low fee option. In the institutional pension fund (defined benefit) market, where fees are *much* lower and sophisticated consultants advise the trustees, you would expect it to be much easier to select good active managers. The reality, which Bernstein addresses, is that institutional pension funds make *more* use of passive or indexed funds, than individuals do. Bernstein's book brilliantly summarises the main points about investing for the individual investor today: 1. stock returns are likely to be a lot lower in the future, than in the past
2. fees on funds are going to be a very important influence on final returns (1 or 2% of 7% annualised returns hurts a lot more than of 13% annualised returns)
3. since it is impossible to know (in advance) who the superior fund managers are going to be, it is better to lodge the majority of money in index funds, which will provide a return, long run average, better than 2/3rds of money managers, at a far cheaper cost But the book is much subtler and deeper than this. It looks at how we get 'valuation bubbles' like the recent dot-com/ telecoms boom, and how humans consistently make investment mistakes for deep seated psychological reasons. It helps you to look sceptically at a financial 'advice' industry, that is really there to make a living off your hard earned savings. Bernstein's bias is towards value investing and he correctly points out that it is possible to pursue this investing style using 'value tilted' index funds, with low fees. Although value as a style has massively outperformed growth over the last 3 years (to the tune of 40% aggregate), it is still a point worth taking in. When stocks in general are expensive (as they still are on any quantitative basis), cheap stocks can still be the way to go. Reading this book, along with David Chilton's 'The Wealthy Barber' and the books by Burton Malkiel and John Bogle, is likely to be among the most rewarding things you can do for your personal wealth, long term.
Rating:
Summary: Lots of Truth and Candor for the Money
Review: A splendid book. I've admired Dr. Bernstein's efforts to popularize modern portfolio theory on his web site (The Efficient Frontier) and read his previous book on asset allocation (The Intelligent Asset Allocator). This book is his best effort yet to bring objective advice to the average investor about portfolio building. Previous reviewers have covered most aspects of this fine work, but I'd like to emphasize one aspect. All individual investors should understand the role of brokers, the financial press, and even mutual funds in the financial industry. Dr. Bernstein lays out who's interests they serve, and where their profits are derived. Be aware. Heartily recommended to new investors, and also to experienced investors who routinely rely on conventional means to make their investment decisions.
Rating:
Summary: Bernstein is really a behavioralist
Review: Bernstein has written an excellent book, but, despite what he says, he is not really an efficient market advocate. In standard economic terminology, a financial market is efficient if it satisfies two conditions. First, the price must be right. In other words, the price of the market index must fully and correctly reflect all relevant information. That is, the set of investors in the market must have an accurate knowledge of the mean and variance of the expected return of the market, and the discount rate must be reasonable as well. The second condition is that there must be no free lunch. In other words, the investors in the market, must, on average, be unable to beat the market on a risk-adjusted basis by investing in a subset of the market.
Bernstein clearly believes the second proposition but not the first one, and he is therefore a behavioralist and not an efficient marketeer. Then why does he stress market efficiency at every turn? Probably because he knows that if he doesn't, many of his readers will try to exploit market inefficiency and will wind up impoverishing themselves. He knows the central paradox of investing: Even though the market is inefficient in terms of condition 1(remember the bubble of 2000), most investors would be better off if they acted as if the market were efficient.
On the whole, his advice is good. Use index funds, trade as little as possible, pick an asset allocation based on your individual risk tolerance and stick with it, and, crucially, rebalance periodically. This is sound advice, straight out of academic financial economics.
Rating:
Summary: The best investment book I've read
Review: Bernstein is obviously extremely analytical and objective. I've been trying find good books on investing and have read quite a few books. Some of those are good. However, no other book I've found gives a clear idea on how to formulate an investment strategy with a clear eye on risk overall with some excellent suggestions on independently going about it like this book. There were many little "gems" in this book in addition to great overarching clear ideas. Also his take on mutual fund companies and some advisors is eye opening. It made me reconsider my current strategy in an objective way. Read it and you will feel more confident in tackling the complex journey of investing.
Rating:
Summary: Pillars of Wisdom
Review: Bernstein's advice is to take a long step back from the daily market reports and concentrate on understanding how the markets work, the 'four pillars', and design your own investment strategy. Bernstein persuades us that with relatively little effort we can build an investment portfolio that is diversified, minimally expensive, and superior to most professionally managed accounts. An ability to estimate the long term return of the major asset classes is a critical skill. Failing to diversify across those asset classes is an investor's biggest risk. Students of modern portfolio theory (MPT) will find FOUR PILLARS to be a companion volume to Larry E. Swedroe's RATIONAL INVESTING IN IRRATIONAL TIMES. The markets are "brutally efficient". Avoid actively managed funds and use index funds to tap into the "collective wisdom" of the market. Market timing, stock-picking, and technical analysis don't work. Indexed securities may be a little dull, but the strategy outperforms the gurus. The first 'pillar' of the book is devoted to investment theory and historical returns of various asset classes. It's the longest section and some of the best material is here. In "Measuring the Beast" there is the the clearest explanation I have read of the dividend discount model (DDM) that is used to determine 'fair value'. This chapter also gives us the Gordon Equation to estimate market returns (Market Return = Dividend Yield + Dividend Growth Rate). Bernstein's conclusions are unsettling: The return of stocks and bonds will likely be similar in the future and their rates of return will probably be lower than in the past. There is no question that having an historical perspective on investment manias and crashes is an important second pillar of understanding for the informed investor. This history has been told before, but the material fits nicely. Bernstein's third pillar analyzes the behavioral errors investors routinely make. A need for excitement (viz. investors drawn towards low-probability/high-payoff situations) and a fundamental misunderstanding of risk/reward that leads investors to conclude that "great" companies must be winning stocks are just two errors that stand out. The fourth pillar of Bernstein's work is his shakiest. His caricature of the investment establishment that includes the brokerage community, mutual fund companies, and the media is painted with broad angry strokes. He is simply incorrect to say that brokers have no fiduciary responsibility towards their clients (It is required by the National Association of Security Dealers, NASD). On the other hand, his incisive analysis of the 401(k) retirement system is an important alarm. Bernstein's closing chapters address some of the big questions investors ask. His "back of the envelope" calculation for retirement nest eggs is as helpful as discovering a Leatherman Tool in your back-pocket. In a variety of investment scenarios the author ably demonstrates the application of his ideas in a specific and flexible manner. But it is fair to say that a typical portfolio will include US and foreign index equity assets with an emphasis on value (versus growth), short maturity bonds, and a real estate index fund. Serious investors will want to read this book.
Rating: 
Summary: Out of date!
Review: Berstein's latest book is an entertaining, somewhat dumbed-down version of his earlier "The Intelligent Asset Allocator". He advocates careful asset allocation, indexing, and portfolio rebalancing. Many readers will find this resonates; after all, Berstein bases his views on the findings of academic finance. The problem with the book is it's outdated. Bernstein advocates using Vanguard funds, but if you're going to take his advice you need to consider seriously exchange traded funds. A similar approach to Bernstein's, but which compares Vanguard funds with ETFs, can be found for free online at ABetterWayToInvest.com. Also, ETFResources provides links about indexing and ETFs.
Rating:
Summary: The Everyday Investment Guide
Review: Bill does it again albeit in a much more readable style. This book is a rare gem. It covers aspects such as investor psychology as well as the blunt truth about future investment returns. The author has the ability to shed light on what is an esoteric industry. He has a dry sense of humour, and clearly sets out the case for the average investor. There is plenty of practical stuff here, and I find I refer to the book frequently. This book is a must for any investor, usurping any similar offerings.
Rating:
Summary: Straight Talk
Review: Debunks the steady stream of prattle coming out of Wall Street and the media. Focuses on what can happen rather than year to date and five year returns. Provides workable plans based on historic reality.
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